Device Identity and the Future of Mobile Phone Insurance

The insurance industry has seen significant innovation over the last few years, as the disruptive effects of new technologies have started to play out. The explosion in business and consumer connectivity has brought with it enormous opportunities in the field of InsurTech. New products are being developed, new distribution channels opened, and the insurer’s role of being able to predict and prevent fraud associated with high value devices is ever more important. The availability of accurate, regularly updated mobile device data, has made the quoting of premiums and settling of claims for mobile phones, a far quicker and more precise affair.

The mobile phone insurance market continues to grow 

Mobile phones represent both a growth and innovation area for insurers. Smartphones have become ubiquitous, and are highly desirable not only to consumers but to the thieves who prey on them, with current models often costing in the region of $1,000. Valued by IMARC at $22.8 billion last year, the global market for mobile phone insurance is showing strong growth, with a projected compound annual growth rate (CAGR) of 9.73% between 2018 and 2024 – bringing it to a total value of $39.8 billion by 2024.

For insurers to make the most of this, however, they must keep pace with the expectations of consumers. One survey of insurance customers indicated that just 15% report being satisfied with their insurer’s digital offering – today’s connected consumers expect results straight away, and in order to ‘delight the customer’ insurers need a way of simplifying and speeding up their customer-facing processes, while protecting their businesses against fraudulent claims. That means being able to determine how much a device is worth at the point of policy issuance, and to verify whether a claim is valid, without undue delay.

The GSMA’s highly-accurate TAC and IMEI data

The GSMA can help here. We are the body responsible globally for issuing mobile device identifiers. Brand owners and manufacturers apply directly to the GSMA for TAC (Type Allocation Code) which forms the first eight digits of the IMEI number. The GSMA alone is able to provide a range of services based on real-time access to TAC and IMEI data. With access to this data at their fingertips, insurers can easily identify the manufacturer-registered model, age and capabilities of a mobile device, allowing them to assess its authenticity and value before agreeing to insure it. Our highly-accurate data can also differentiate between phones and cellular IoT devices, such as wearables.

Whenever a mobile device is reported lost or stolen, the GSMA encourages mobile network operators to upload its IMEI number to the GSMA IMEI Black List, where we maintain the world’s most complete registry of lost or stolen devices. So in addition to being able to identify the defining characteristics of the device, the GSMA’s data can also indicate if the device has previously been reported as lost or stolen, or identify if the device has been fraudulently obtained, equipping insurers with a highly accurate shield against fraudulent policy applications or claims. The data also helps to verify the legitimacy of refurbished devices, which according to IMARC, make up 29.9% of the total global market for mobile phone insurance.

Helping combat international device crime 

A recent development in the GSMA IMEI Blacklisting service is that we have extended the blacklisting role to include not only the mobile network operators, but we have enabled insurers and other trusted parties to report devices as lost, stolen or fraudulently obtained.

The GSMA data is made available by high performance APIs enabling insurance policy issuance and claims processing software to tap into information instantly. McKinsey have found that automation is capable of cutting the cost of claims processes by around 30%; for insurers looking to make those kinds of savings while insuring mobile devices – and gain the market advantage of being able to pass those savings on to customers in the form of lower premiums – they need access to the data which makes it possible.

The GSMA is already working with leading global insurance companies and stands ready to work with any insurer seeking to accurately quote premiums and reduce fraudulent claims losses.

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